Senator Christopher Dodd wants to create the greatest single debacle in the history of US financial market and bank regulation. He will propose putting four authorities into one, combining the Federal Reserve, Federal Deposit Insurance Corp, Office of Thrift Supervision, and the Comptroller of the Currency. The move would put several dysfunctional agencies into one.
Dodd has failed to look at the practical aspects of rolling up several authorities which have thousands of federal employees and which have performed their current roles for decades. The effort would be so Herculean that it might still be going on after the next presidential election. The daily regulation of the banking industry would certainly suffer due to the confusion that an elimination of some of the agencies would involve.
Of course, Dodd wants to do all this within a year of a near collapse of the credit and financial markets and during a period when these portions of the economy are still fragile. Otherwise, it is a fine idea.
Douglas A. McIntyre
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